Asian Stocks Up on Recovery Optimism But Tempered by Rising U.S.-China Tensions

By Gina Lee

Investing.com – Asian stocks posted modest gains on Tuesday morning, with investors optimistic about the global economic recovery from the COVID-19 virus, with companies re-opening for business and the global economy starting on the long but certain road to recovery.  

Hong Kong’s was up by 0.58% by 10:42 PM ET (3:42AM GMT).   

China’s was up 0.07% and the was up 0.10%, with both indexes reversing earlier gains.

Investor sentiment soured over mounting U.S.-China tensions after China informed state-owned firms on Monday to halt purchases on U.S. agricultural products such as soybeans, as well as cancel some U.S. pork orders.  

China’s actions puts the first phase of the U.S.-China trade deal signed in January, and is the latest move in the tit-for-tat between the two countries, with the latest round triggered by China’s National People’s Congress almost unanimously voting to draft and enact national security laws for Hong Kong and Macau during the previous week.  

Japan’s rose 0.99% and South Korea’s gained 0.85%.  

Down Under, the rose 0.01%. The Reserve Bank of Australia will announce its interest rate decision later in the day.  

Meanwhile, investors were also spooked after U.S. President Donald Trump threatened on Monday to use force to quell the ongoing protests in dozens of U.S. cities over the death of George Floyd.  

“If American consumers were reluctant to come out of their COVID-19 lockdown cocoon fearing a secondary spreader, it’s unlikely they will feel any safer with military Humvees rolling down Pennsylvania Avenue,” Stephen Innes, Chief Global Markets Strategist at AxiCorp, said in a note.